Peak oil may have occurred in 2008
(see Dr Michael Lardelli from the University of Adelaide, “The peak oil
production has passed”, Ockham’s Razor, ABC Radio National, 2 May 2010: http://www.blogotariat.com/node/205789
). Peak coal may be
only 10 years away and may provide a major attendant market-based carbon price
stimulus for rapid implementation of renewable energy according to a very
important paper that has just been published in the prestigious scientific
journal Nature, specifcally Richard Heinberg
& David Fridley, “The end of cheap coal”, Nature 468, 367-369 (18 November
2010), online 17 November 2010: http://www.nature.com/nature/journal/v468/n7322/full/468367a.html
.

The Nature summary says that “New
forecasts suggest that coal reserves will run out faster than many believe.
Energy policies relying on cheap coal have no future, say Richard Heinberg and
David Fridley. World energy policy is gripped by a fallacy — the idea that coal
is destined to stay cheap for decades to come. This assumption supports
investment in 'clean-coal' technology and trumps serious efforts to increase
energy conservation and develop alternative energy sources.” Key figures from
the paper on coal production and consumption (Figure 1) and global coal reserves
(Figure 2 ) can be seen here: http://www.nature.com/nature/journal/v468/n7322/fig_tab/468367a_ft.html
.

The key
point is that readily extracted, good quality (and hence cheap) coal may peak
by 2020 with attendant steep price rises. The Nature paper concludes thus (see:
http://www.blogotariat.com/node/205789
) : “At the very least, the USGS
should urgently complete a new national coal survey. And it is essential for the
security of energy supplies globally that Chinese domestic coal production and
the timing of its likely decline is better
understood.

We believe
that it is unlikely that world energy supplies can continue to meet projected
demand beyond 2020. Therefore, new limits on energy consumption will be
essential in all sectors of society — including agriculture, transportation and
manufacturing — and will be imposed by energy prices and shortages if they are
not achieved through planning and policy.

Supply
limits also have implications for the development of clean-coal technology. Also
known as carbon capture and storage (CCS), clean coal is one proposal for
reducing greenhouse-gas emissions while growing energy supplies. Because
maintaining economic growth while cutting coal out of the energy equation
globally will be difficult, and because nearly everyone assumes that coal will
remain cheap far into the foreseeable future, the idea is to keep the carbon
dioxide produced by burning coal from going into the
atmosphere.

There are
two hitches: the difficulty of scaling up such an enterprise, and its effect on
electricity prices. As many analysts have noted, the scale and cost of
clean-coal infrastructure will be vast13.
Energy analysts agree that this will boost the price of electricity, but the
scheme could work if coal prices remain low. If they don’t, building new coal
plants — conventional or clean — makes little economic sense, except to replace
ageing inefficient infrastructure.

Nations should
immediately begin to plan for higher fossil-fuel prices and to make maximum
possible investments in energy efficiency and renewable-energy infrastructure.
Even then the world will have to accept a slowdown in economic
growth.”